Deceased Claim Settlement for All Type of Bank Accounts

Last updated on October 9th, 2023 at 01:01 pm

Bank Account has become essential for everyone as the Basic Financial Services are improving the life style of people all around the country. But the people are not adequately educated on the important topic Death claim settlement process as much.

With the launch of financial inclusion and the subsequent Jan Dhan Account Schemes the majority of the population has got the bank account. And the people are regularly using the savings accounts for other transactions as well.

Though people are getting used to the new financial tools, the awareness on the Deceased Claim process is not up to the mark.

Here in this article we would compare how and to whom the deposit amount is settled.

Deceased Claim on Deposit Account

Deceased Claim process has evolved over time to give a simple process for Settlement of amount in the bank account.

But first understand the basic terms like Nomination and Surviorship in a bank account.

Nomination

The important thing everyone should do with their bank account is to add Nominee to the account. Also read our other article on Importance of Adding Nominee to account for further details.

In simpler words Nominee is the person Account Holder appoints to receive the money in the event of his death. Thus this will simplify the claim process by avoiding the involvement of all the legal heirs.

Survivorship on Account

For a single person operated account Survivorship clause is not applicable. But for the joint account opened with the mode of operation as below has survivor clause.

• Either or Survivor
• Anyone or Survivor
• Former or Survivor
• Latter or Survivor

In these specific cases if the account holder dies the Survivor will have access to the fund in the account. There is no restriction to the survivor clause unless there is a court order restraining the same.

Thus the claim settlement process varies for the account with and without survivour clause. We will elaborate on Settlement Claim on Various types of account below.

Types of Account

For simple understanding of claim settlement process we will make three categories of account based on mode of operation.

1. Single Operated Account
2. Joint Account without Survivorship Mandate
3. Joint Account with Survivorship Mandate

1. Single Operated Account

Settlement of Claim Single account with Nomination

The balance amount will be paid to nominee on verification of nominee identity and proof of death of depositor. Premature termination of term deposit account will be permitted at the request of nominee.

Settlement of Claim Single account without Nomination

The balance amount will be paid to legal hair/s (or any one of them as mandated by all legal hairs)on verification of authority of legal hair/s and proof of death of depositor. Premature termination of term deposit account will be permitted at the request of legal hair/s.

2. Joint Account without Survivorship Mandate

Account with Nomination

• Death of one (or more but not all) of the joint account holders. – The balance amount will be paid jointly to survivor/s and legal hair/s of the deceased account holder/s against their joint claim.
• Death of all the joint account holders. – The balance amount will be paid to nominee.

Account without Nomination

• Death of one (or more but not all) of the joint account holders. – The balance amount will be paid jointly to survivor/s and legal hair/s of the deceased account holder/s against their joint claim.
• Death of all the joint account holders. – The balance amount will be paid jointly to legal hairs of all joint account holders (or any one of them as mandated by all legal hairs) on verification of authority of legal hair/s and proof of death of depositor. Premature termination of term deposit account will be permitted at the request of legal hair/s.

Settlement of Claim Joint Account with Survivorship Mandate

Account with Nomination

• Death of one (or more but not all) of the joint account holders – The balance amount will be paid to Survivor.
• Death of all the joint account holders – The balance amount will be paid to nominee.

Account without Nomination

• Death of one (or more but not all) of the joint account holders – The balance amount will be paid to Survivor.
• Death of all the joint account holders – The balance amount will be paid jointly to legal hairs of all joint account holders.

Conclusion

The purpose of introduction of claim settlement process by RBI is to reduce the time and paperwork required for settlement. This will help both the bank and the legal heirs by reducing the time and effort required for processing.

We hope this article shed light on your queries and helped you understand how the deceased claim settlement works. For further queries comment on below we will surely resolve the same at earliest.